The Managing Director of the International Monetary Fund urged China to end its massive lockdowns

Profile photo: IMF Managing Director Kristalina Georgieva.

The Managing Director of the International Monetary Fund (IMF) said it was time for China to abandon the massive lockdown and respond more specifically to the coronavirus pandemic. Such a change, she said, would mitigate the impact on the world economy. At present, the global economy is already facing high inflation, an energy crisis, and food supply disruption. In recent days, a rare large-scale anti-zero policy protest has broken out across China.

In an interview with The Associated Press on Tuesday (Nov. 29), IMF Managing Director Kristalina Georgieva urged a “recorrection” of China’s draconian “zero” policy of isolating every case, “precisely because of its impact on people and the economy.”

In an interview with The Associated Press in Berlin on November 29, International Monetary Fund Managing Director Kristalina Georgieva advised the Chinese government to adjust its zero-zero policy. China’s relaxation of overly stringent anti-epidemic measures will also help ease pressures on global supply chains, she said. 

In an interview with The Associated Press, Georgieva also touched on a wide range of topics. She warned that it is too early for the Fed to stop raising interest rates, and hoped that the energy crisis caused by the Russia-Ukraine war would promote the development of renewable energy in Europe. She also called the hunger that developing countries are experiencing “the most important solvable problem in the world.”

This past weekend, protests erupted in several Chinese mainland cities and in Hong Kong, the highest-profile public dissent in decades. Authorities have eased some lockdowns, but show no sign of abandoning their overall “zero” policy, which has kept millions of people at home at the same time for months.

“We see the importance of abandoning mass lockdowns and adopting more targeted restrictions,” Georgieva said. Doing so can help curb the spread of COVID without significant economic costs.

Georgieva also urged China to review its vaccine policy and focus on vaccinating “vulnerable groups.”

Low vaccination rates among the elderly are a major reason Beijing has been in lockdown, while the emergence of more contagious variants of the virus is putting increasing pressure on efforts to prevent any transmission.

The lockdown has slowed down all activity in China, the world’s second-largest economy, affecting tourism, retail, and car sales. Georgieva urged China to “adjust its overall assessment strategy of supply chain operations to take into account global spillovers.” The

Washington-based International Monetary Fund expects China’s economic growth to be just 3.2 percent this year, below the global average, which is an infrequent phenomenon.

The Chinese Communist Party has previously taken steps in the direction Georgieva suggested, with some places no longer locking down entire cities, but only residential buildings or neighborhoods where cases were found, and the government said it had made other changes to reduce the cost to the population and the economy. But since October, a sharp increase in the number of cases has prompted local authorities under pressure from higher authorities to take mandatory quarantines and other measures that local residents consider too extreme.

Asked about criticism of the crackdown on protests, a Chinese Foreign Ministry spokesman defended Beijing’s anti-epidemic policies, saying people’s legitimate rights were protected by law.

Zhao Lijian has said that the government is trying to “protect people’s lives and health to the greatest extent and minimize the impact of the epidemic on economic and social development.”

China is a founding member of the International Monetary Fund, with a seat on the organization’s 24-member executive board, while many countries share only one. China’s 6% voting share is second only to the United States and Japan.

Despite the global impact of China’s anti-epidemic policies, Georgieva pointed out that the biggest threat to the worldwide economy now comes from high inflation, which requires central banks to raise interest rates and increase the cost of credit for consumers and businesses. In addition, the government needs to take care of the most vulnerable without undermining the central bank’s efforts.

Asked whether the Federal Reserve should pause raising interest rates, Georgieva said that “the Fed has no choice but to keep going” until inflation comes down convincingly. The Fed’s rate cuts are raising the value of the dollar and putting pressure on poorer countries.

Georgieva said inflation data remains high in the United States and Europe, “The data at the moment suggests that it is too early to return it later.” Georgieva

also warned that international tensions between China and the West, as well as between Russia and the West, could limit trade and its beneficial impact on economic growth and prosperity. She added that while there are concerns about supply chain disruptions due to the coronavirus pandemic, “we have to work harder to find a way to counter these protectionist instincts” while being open and honest about supply chain issues of concern.

Russia’s war in Ukraine has also created an energy crisis, with Moscow cutting off most gas supplies to Europe as Western allies backed war-torn Ukraine. The resulting high energy prices create opportunities to “accelerate the transition to low-carbon energy supply” by encouraging green investments.

(This article is based on an Associated Press report.)